Man power supply service to govt, Goods and Services Tax - GST

[Pon Ramar]

Sir,

I do pure man power supply service to both CENTRAL and state Government. Who should pay the GST? Service provider or receiver?

Posts / Replies

[KASTURI SETHI]

Servicer Provider should pay GST.

[Pon Ramar]

Sir can you tell me by which act, notification number and date with full details. How much percentage should I pay?

[KASTURI SETHI]

Manpower service is out of RCM after implementation of GST.

[Rajagopalan Ranganathan]

Sir,

According to Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 "Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution is chargeable to tax At 'Nil' rate.

[CS SANJAY MALHOTRA]

Sh Rajagopalan ji

Request you to please review your reply.

[KASTURI SETHI]

Sh.CS Sanjay Malhotra Ji,. I want comprehensive reply from you on this issue. Thanks K.L. Setbi

[CS SANJAY MALHOTRA]

In the Erstwhile Service tax Act, Notification No. 25/2012-ST (Entry No. 60) provides for exemption from Service tax for following:

"Services by Government, local authority or a government authority by way of any activity in relation to function entrusted to Panchayat under Article 243G of Constitution"

The above exemption is continued in GST vide understated provision in CGST Act.

Sec 7(2) Notwithstanding anything contained in sub-section (1),––

(b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services.

"Services To" Govt......were not exempted in erstwhile Service Tax Act, which has been recently introduced vide Notification No. 12/2017-CGST dated 28.06.17, but for Pure Services only and that too for services performed which is in relation to function entrusted to Panchayat under Article 243G of Constitution. (Specific Restriction)

(Article 243G)

1. Agriculture, including agricultural extension.
2. Land improvement, implementation of land reforms, land consolidation and soil conservation.
3. Minor irrigation, water management and watershed development.
4. Animal husbandry, dairying and poultry.
5. Fisheries.
6. Social forestry and farm forestry.
7. Minor forest produce.
8. Small scale industries, including food processing industries.
9. Khadi, village and cottage industries.
10. Rural housing.
11. Drinking water.
12. Fuel and fodder.
13. Roads, culverts, bridges, ferries, waterways and other means of communication.
14. Rural electrification, including distribution of electricity.
15. Non-conventional energy sources.
16. Poverty alleviation programme.
17. Education, including primary and secondary schools.
18. Technical training and vocational education.
19. Adult and non-formal education.
20. Libraries.
21. Cultural activities.
22. Markets and fairs.
23. Health and sanitation, including hospitals, primary health centres and dispensaries.
24. Family welfare.
25. Women and child development.
26. Social welfare, including welfare of the handicapped and mentally retarded.
27. Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes.
28. Public distribution system.
29. Maintenance of community assets.]

(Article 243W)

1. Urban planning including town planning.

2. Regulation of land-use and construction of buildings.

3. Planning for economic and social development.

4. Roads and bridges.

5. Water supply for domestic, industrial and commercial purposes.

6. Public health, sanitation conservancy and solid waste management.

7. Fire services.

8. Urban forestry, protection of the environment and promotion of ecological aspects.

9. Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded.

10. Slum improvement and upgradation.

11. Urban poverty alleviation.

12. Provision of urban amenities and facilities such as parks, gardens, playgrounds.

13. Promotion of cultural, educational and aesthetic aspects.

14. Burials and burial grounds; cremations, cremation grounds; and electric crematoriums.

15. Cattle pounds; prevention of cruelty to animals.

16. Vital statistics including registration of births and deaths.

17. Public amenities including street lighting, parking lots, bus stops and public conveniences.

18. Regulation of slaughter houses and tanneries.

CONCLUSION

Lets say if Querist is into supply of Manpower to GST Office, would it get covered under Article 243G / 243W . No, as the service is not in relation to function entrusted in relation to Panchayat / MC.

Concern of Govt is whether they provides services as stated under respective articles as above or is outsourced by Govt, both will be subject to NIL Tax, which was not the case earlier and Govt, stands to loose.

Hope I have been able to address the issue as desired.

[Pon Ramar]

Sh Sanjay malhotra. Can you please let me know who should pay the GST? We are supplying manpower for minimum wages for the government . Whether the information told by rajagopalan ji can be taken into account?

[Pon Ramar]

Sir we are supplying Labours to perform the jobs you have mentioned in article 243G and 243W. We are supplying manpower to the municipal corporation, local authorities, milk dairy. Should the service provider still pay the GST?

[CS SANJAY MALHOTRA]

Let me share example and you will be able to address your query yourself.

Cleanliness of Roads, Public places is function of Municipal corporation. If the said activity is outsourced i.e. Manpower is supplied by you, then NO GST.

Likewise, if Manpower supplied by your company is performing the work which MC has to execute / or is covered under Article 243W as shared earlier, GST shall be NIL.

[KASTURI SETHI]

Sh.CS Sanjay Malhotra Ji, Sir,. "MRI" done by you. Clouds vanished. Words fail to express my thanks.

[salamat shidvankar]

Dear All,

thanks for sharing your expert view, i would be glad if you answer my query which is. A company registered under GST gets a contract to operate Pay and park from municipal corporation by paying a license fees as monthy compensation and allowing me to collect money from general public who uses the pay and park facility as per their Tariff defined. Municipal corporation is charging GST on License fees as per renting of immovable property. now municipal corporation is not allowing me to collect gst over and above the predefined tariff neither they are saying the tariff is inclusive of GST. in this case the what should be the payable GST on charges collected as pay and park by the company also if this comes under pure services or under 243w etc. please clarify with notification or clauses. thanking you